Its 4,800 employees here . . . not to mention Brian Cowen and Ireland Inc, more generally . . . had better hope so.

Intel chief executive Paul Otellini may have officially launched the super-fast Core 2 Duo processors at the company's Santa Clara, California, headquarters last Thursday, but many of them trace their origins to the company's 1.6bn fabrication plant in Leixlip.

The warm reception that Core 2 is getting, particularly among games enthusiasts, will bring some badly needed cheer to company executives, who also learned recently they had just retaken the lead from rival chipmaker AMD in American retail sales.

Recent weeks have not been so buoyant. Profit warnings from both Intel and Dell in the space of two days earlier this month have hit technology stocks across the board. With the exception of stand-outs such as Motorola and Apple, the second-quarter earnings season has been largely overshadowed by poor results from the old reliables.

When both the world's leading computer seller and its biggest chip manufacturer are having problems at precisely the same moment, Wall Street tends to worry about the prospects for the entire tech sector.

It's also a source of concern to an Irish economy which, thanks to the Irish subsidiaries of Dell and Intel, counts both chips and PCs among its most significant exports. Those two companies are the two largest exporters in the Republic. Dell alone accounts for 5.5% of Irish exports, 2% of the value of goods and services produced in Ireland, and over 4% of all expenditure in the Irish economy.

News from its Texas headquarters that sales growth is slowing, margins are under pressure and profit targets are not being met is disturbing. Dell shares have almost halved in value since this time last year, falling to $21 from a high of more than $40. The company saw $4.97bn wiped off its market capitalisation in a single day earlier this month on the back of a shock profit warning.

"Certainly, Dell's not going anywhere, " said Clay Sumner, equity analyst with US investment bank Friedman Billings Ramsey (FBR), but it has a lot of work to do to get back on track. Dell's low-cost manufacturing and direct delivery model propelled it to the top of the pile, but its cost advantage has gradually been eroded, according to Sumner.

Dell's competitors, including its main, rival, HP, have cut costs and closed the gap. In July 2005, HP announced that it would shed 14,500 jobs, or about 10% of its staff, to reduce costs by just under $2bn a year and boost earnings.

In the last quarter, HP further restructured its supply chain and whittled away Dell's remaining advantages. Both Dell and its rivals have come to rely on what Sumner described as "the same cast of characters" in the Far East to supply them with the components. This is particularly true when it comes to laptops.

Morgan Stanley estimated last year that some 89% of laptops with American brand names are, in fact, almost entirely configured and built by a tight network of a relatively small number of factories in Taiwan and mainland China.

Some 25% of all laptops sold last year, no matter what the brand says on the side, were actually designed and built by the Taipei-based firm Quanta.

And consumers increasingly prefer laptops to the boxy desktops at which Dell excelled. "Dell does not have a cost disadvantage, but it has less of a cost advantage, " Sumner said.

With little to differentiate the core products from those offered by competitors, the focus shifts to customer service, where Dell has fallen down in recent times. The company has signalled its intent to invest in more call centres and new staff to put that right.

While Dell increases spending on customer service, though, Sumner said investors are concerned about declining margins. FBR's analysis indicates that Dell generates as much as 30% of its operating profit from the extended service contracts and warranties . . . effectively insurance contracts . . . that it sells to consumers with their computers.

"Service contracts are the highest margin business that they have, " he said.

Figures from UBS bank in New York indicate that Dell's gross profit margin has fallen from 18.6% to 15.2% over the last year. Sumner suspects that the falling margins may be partly attributable to falling demand for service contracts and warranties . . . a worrying development for the company.

The bad news will have been duly noted by top brass at Intel, which counts Dell among its biggest customers. Intel, meanwhile, has worries of its own. Last month the company unveiled a 1.6bn manufacturing plant in Leixlip, its second major manufacturing facility in Co Kildare.

Fab 24-2 (fab being short for fabrication) will produce the next generation of powerful, energy-efficient chips for desktop computers and laptops.

Opening the plant, Paul Otellini noted the company's lacklustre results over the first quarter of 2006, but stuck to the company's guidance for the second half of the year, when it expected to see a bounce.

In the space of four weeks, Otellini has rowed back on that statement. Intel missed second quarter forecasts and has now indicated that it is unlikely to hit its full-year targets. Rival chipmaker AMD . . . a marginal player just a few years ago . . . continues to eat into its market share, forcing Intel to make some difficult decisions.

Ranjit Atwal, senior analyst with consultants Gartner, said the company has taken its eye off the ball. "They have been suffering for a year on execution problems, " he said. AMD has won fans, and customers, through superior service and customer support.

In what is, effectively, a "world of commodity", that's what makes the difference, according to Atwal. "The vendors have started to take AMD on board more, " he said.

Intel, which once proudly boasted that 90% of the world's computers had Intel inside, saw its market share fall below 80% in 2005. New products, including those produced in Leixlip, will be introduced faster than scheduled in an effort to steal the initiative back from AMD. Prices will also be slashed, and jobs will be cut.

Having recently announced that the company would cut 1,000 jobs, chief financial officer Andy Bryant told US analysts last week that Intel planned to reduce its overall headcount below 100,000 by the end of the year. That equates to at least 2,500 jobs across the company's global operations.

Intel said the impact on its Irish operations would be "negligible", but refused to provide details on how many jobs would go in Leixlip.

A spokeswoman for Intel Ireland said the Kildare-based subsidiary was operating close to full capacity, and that both its manufacturing facilities were "fully loaded and are doing very well".